CMS Encounter Data Update: RARC Codes N923, N924, N925 and N926

CMS has introduced four informational Remittance Advice Remark Codes (RARCs) for Medicare Advantage encounter data submissions. The new codes — N923, N924, N925 and N926 — are intended to communicate the Medicare Advantage organization's payment responsibility determination for an encounter.

CMS announced the encounter data submission update on July 17, 2026. Beginning September 11, 2026, the Encounter Data System (EDS) began accepting the new RARC codes, and CMS strongly encourages Medicare Advantage organizations and other encounter data submitters to report the applicable payment status on encounter submissions.

This update is particularly important for organizations that create or process X12 837 encounter transactions because CMS instructs submitters to report these informational RARCs within the Loop 2320 and Loop 2430 CAS (Claims Adjustment) segments.

Why Did CMS Introduce the New RARC Codes?

CMS uses encounter data submitted by Medicare Advantage organizations for a variety of program purposes. As part of the July 2026 update, CMS identified a need to more clearly determine the payment status of services represented on submitted encounters.

The new informational RARCs allow an MA organization to indicate whether it has completed its payment responsibility determination and whether the encounter or individual service was denied, not denied or is still pending.

CMS considers a service denied when the MA organization determines during adjudication or re-adjudication that it has no payment responsibility for the service. This includes situations in which the entire payment responsibility rests with another payer.

What Do RARC Codes N923, N924, N925 and N926 Mean?

Where Are the New RARC Codes Reported on the 837?

CMS instructs encounter data submitters to report the new informational RARC codes in the CAS segment. Depending on the payment status being reported, the CAS can be located at either the claim/header level or the individual service-line level.

How Are Partially Denied Encounters Reported?

The reporting requirements become especially important when an encounter contains a mixture of denied and non-denied service lines.

When one or more service lines are denied but at least one other service line is not denied, CMS instructs the submitter to report N926 (Partially Denied) at the encounter header level. Each associated service line must then contain the appropriate N923, N924 or N925 status.

Loop 2320 - Encounter/Header
CAS → N926 (Partially Denied)

Loop 2430 - Service Line 1
CAS → N923 (Not Denied)

Loop 2430 - Service Line 2
CAS → N925 (Denied)

Loop 2430 - Service Line 3
CAS → N923 (Not Denied)

This allows the header to identify the encounter as partially denied while the individual service-line CAS segments communicate the status of each service.

Can the New RARC Be Reported with an Existing CARC?

Yes. CMS states that the new informational RARC codes may be submitted with or without an existing Claim Adjustment Reason Code (CARC) reported in the CAS segment.

This distinction is useful because the codes communicate different information. An existing CARC may describe the reason for an adjustment, while N923 through N926 communicate the MA organization's payment responsibility status for the encounter or service.

CMS also states that MA organizations may continue reporting CARCs as they do today.

Understanding the CAS Segment Placement

A CAS segment can contain multiple reason-code and amount repetitions. When an applicable CAS already contains an adjustment reason, the informational RARC may potentially be represented through an additional reason-code repetition within the CAS.

For example, the general CAS structure can include:

CAS01 = Claim Adjustment Group Code

First Reason/Amount Group:
CAS02 = Adjustment Reason Code
CAS03 = Adjustment Amount
CAS04 = Adjustment Quantity

Second Reason/Amount Group:
CAS05 = Adjustment Reason Code
CAS06 = Adjustment Amount
CAS07 = Adjustment Quantity

... additional reason/amount/quantity groups ...

Sixth Reason/Amount Group:
CAS17 = Adjustment Reason Code
CAS18 = Adjustment Amount
CAS19 = Adjustment Quantity

When an existing CARC is already reported in the applicable CAS segment, the new informational RARC may potentially be reported using an additional reason-code repetition within that CAS, rather than adding a separate CAS segment solely for the informational RARC.

What Happens When an Encounter's Status Changes?

The payment status reported on an encounter may not always remain the same. This is particularly relevant to N924, which indicates that the MA organization has not yet made its payment responsibility determination.

If the status changes after the original encounter submission — for example, from pending to denied or not denied — CMS instructs the MA organization to submit a replacement encounter containing the updated payment status.

CMS states that it expects MA organizations to make best efforts to report the final payment status and will monitor reporting of the new informational RARCs.

New MAO-002 Informational Edits

CMS also introduced informational edits to help identify encounters that do not contain the expected RARC reporting.

These edits apply to institutional, professional, DME and dental encounter submissions. CMS identifies both as informational edits rather than encounter rejection edits.

What Should Encounter Data Submitters Review?

Organizations responsible for generating or processing Medicare Advantage encounter data should review how payment responsibility information is currently captured and translated into their outbound encounter transactions.

• Determine how N923, N924, N925 and N926 will be derived from the encounter's adjudication status.
• Review generation of the Loop 2320 CAS at the encounter/header level.
• Review generation of the Loop 2430 CAS at the service-line level.
• Ensure N926 is used only at the header level.
• When N926 is reported, ensure each applicable service line receives N923, N924 or N925.
• Determine how the new informational RARC will coexist with CARCs already being reported in the CAS.
• Review replacement encounter processing when a previously reported payment status changes.
• Monitor MAO-002 reports for informational edits 28000 and 28005.

What CMS Has Not Specified in the July 2026 Announcement

Although CMS clearly identifies the CAS segment as the reporting location for the new informational RARCs, the July 2026 announcement does not provide a complete example of an X12 837 encounter containing the new codes.

In particular, the announcement does not identify:

• The specific Claim Adjustment Group Code to use in CAS01 for the informational RARC.
• A complete 837P or 837I CAS example showing a CARC and one of the new informational RARCs together.

These details are important when implementing the change because the CMS announcement identifies where the informational RARCs should be reported but does not provide a complete CAS example. Organizations should therefore avoid assuming that a particular CAS01 group code is required solely from the July 2026 announcement.

Key Takeaway

The new N923 through N926 informational RARCs give CMS a more direct way to identify the payment responsibility status of Medicare Advantage encounter data. Beginning September 11, 2026, EDS accepts these codes in the 2320 and 2430 CAS segments, with N926 providing the header-level indicator for encounters containing a mixture of denied and non-denied service lines.

For encounter data developers and submitters, the primary implementation considerations are determining the correct payment status and reporting the applicable RARC at the appropriate header or service-line level. N923, N924 and N925 may be reported in the 2320 or 2430 CAS segments, while N926 is reported only at the header level in Loop 2320. When N926 is reported, each associated service line must also report N923, N924 or N925, as applicable, in Loop 2430.

Important: This article summarizes CMS encounter data guidance announced in July 2026. Medicare Advantage encounter data requirements may be updated through subsequent CMS or CSSC guidance. Organizations should review current program requirements before implementing production changes.

For technical requirements related to X12 837 transactions and the CAS segment, refer to the applicable X12 implementation guides and current CMS encounter data submission guidance.